AMENDMENT AGREEMENT
This
Amendment Agreement (the “Agreement”), dated as
of February 21, 2008, is by and among Guangzhou Global Telecom,
Inc., a Florida corporation (the “Company”) and the
investors signatory hereto (each, a “Purchaser” and
collectively, the “Purchasers”).
WHEREAS,
pursuant to a securities purchase agreement dated July 31, 2007 among the
Company and the Purchasers (the “Purchase Agreement”),
the Purchasers were issued debentures and warrants in the individual amounts set
forth below such Purchaser’s name on the signature pages to the Purchase
Agreement;
WHEREAS, the parties also wish to amend
certain terms of the Transaction Documents and proceed with the Second
Closing.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Purchasers and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1. Definitions. Capitalized
terms not defined in this Agreement shall have the meanings ascribed to such
terms in the Purchase Agreement.
ARTICLE
II
AMENDMENTS
AND OTHER AGREEMENTS
Section
2.1. Amendment to Conversion
Price. Immediately prior to the consummation of the
transactions contemplated hereunder, the Conversion Price shall be reduced to
equal $0.28, subject to adjustment pursuant to the terms of the
Debentures.
Section
2.2 Amendment to the Exercise
Price of the Warrants. Immediately prior to the consummation
of the transactions contemplated hereunder, the Exercise Price (as defined in
the Warrants) shall be reduced to $0.28, and the number of Warrant Shares
issuable thereunder shall be increased such that the aggregate Exercise Price
payable thereunder, after taking into account such decrease in the Exercise
Price, shall be equal to the aggregate Exercise Price prior to such
adjustment.
Section
2.3 Waiver of certain Second
Closing Conditions. Subject to the terms and conditions set forth herein,
each Purchaser, severally and not jointly with the other Purchasers, hereby
waives the condition to the Second Closing set forth in Section 2.3(b)(v) of the
Purchaser Agreement that the Registration Statement be declared effective by
February 1, 2008, provided that a Registration Statement registering 130% of the
Registrable Securities (as defined in the Registration Rights Agreement) has
been declared effective prior to the date hereof and shall have thereafter
remained effective through and including the date of the Second
Closing.
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Section
2.4 Effect on Purchase
Agreement. The foregoing consents and waivers are given solely in
respect of the transactions described herein. Except as expressly set
forth herein, all of the terms and conditions of the Transaction Documents shall
continue in full force and effect after the execution of this Agreement, and
shall not be in any way changed, modified or superseded by the terms set forth
herein. This Agreement shall not
constitute a novation or satisfaction and
accord of any Transaction Document.
Section
2.5 Filing of Form
8-K. Within 1 Trading Day of the date hereof, the Company
shall issue a Current Report on Form 8-K, reasonably acceptable to each
Purchaser disclosing the material terms of the transactions contemplated hereby,
which shall include this Agreement, and the schedules hereto, as an attachment
thereto.
Section
2.6 Conditions to Purchasers
Obligations. The respective obligations of the Purchasers
hereunder and in connection with the Second Closing are subject to the following
conditions being met:
(a) the
accuracy in all material respects on the date of the Second Closing of the
representations and warranties of the Company contained herein;
(b) all
obligations, covenants, conditions, deliveries and agreements of the Company
required to be performed at or prior to the Second Closing shall have been
performed;
(c) all
Purchasers parties to the Purchase Agreement shall have agreed to the terms and
conditions of this Agreement;
(d) the
delivery of an opinion of counsel to the Company regarding this Agreement and
the Second Closing, in form and substance reasonably acceptable to the
Purchasers;
(e) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and
(f) from
the date hereof to the Second Closing, trading in the Common Stock shall not
have been suspended by the Commission (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Second Closing), and, at any time prior to the Closing, trading in
securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of each Purchaser, makes
it impracticable or inadvisable to consummate the transactions
hereunder.
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ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations and
Warranties of the Company. The Company hereby make the
representations and warranties set forth below to the Purchasers that as of the
date of its execution of this Agreement:
(a) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of such Company and no
further action is required by such Company, its board of directors or its
stockholders in connection therewith. This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
(b) No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any lien upon any of the properties or
assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
the Company is a party or by which any property or asset of the Company is bound
or affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected.
(c) Other Representations,
Warranties and Covenants. Except as set forth on Schedule 3(c), the
Company hereby represents and warrants to each Purchaser that the Company’s
representations and warranties listed in Section 3.1 of the Purchase Agreement
are true and correct as of the date hereof.
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Section
3.2. Representations and
Warranties of the Purchasers. The Purchaser hereby makes the
representations and warranties set forth below to the Company that as of the
date of its execution of this Agreement:
(a) Due Authorization.
Such Purchaser represents and warrants that (i) the execution and delivery of
this Agreement by it and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action on its behalf and (ii)
this Agreement has been duly executed and delivered by such Purchaser and
constitutes the valid and binding obligation of such Purchaser, enforceable
against it in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be made in accordance with the provisions of the
Purchase Agreement.
Section
4.2 Survival. All
warranties and representations (as of the date such warranties and
representations were made) made herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the parties hereto and shall survive the transactions
contemplated hereby. This Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of each of the parties; provided
however that no party may assign this Agreement or the obligations and rights of
such party hereunder without the prior written consent of the other parties
hereto.
Section
4.3 Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
Section
4.4 Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
4
Section
4.5. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the Purchase Agreement.
Section
4.6. Entire
Agreement. The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
Section
4.7 Construction. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
Section
4.8 Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each
Purchaser hereunder are several and not joint with the obligations of any other
Purchasers hereunder, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Purchaser pursuant hereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
Section
4.9 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder, by written notice to the other parties, if the Closing
has not been consummated on or before February 22, 2008.
Section
4.10 Fees and
Expenses. Except as expressly set forth herein,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all transfer agent fees, stamp
taxes and other taxes and duties levied in connection with the delivery of any
Securities.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
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By:_____________________________________
Name:
Title:
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[PURCHASER
SIGNATURE PAGES TO GZGT
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
Name of
Purchaser:
_____________________________________________________________
Signature of Authorized Signatory of
Purchaser: ______________________________________
Name of
Authorized Signatory:
____________________________________________________
Title of
Authorized Signatory:
_____________________________________________________
Email
Address of
Purchaser:_______________________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Securities for Purchaser (if not same as above):
Second
Closing Subscription Amount:
Second
Closing Principal Amount (Subscription Amount x
1.142857):
